close protection exchange rates

Published on in Foreign Exchange News by

Close protection security and armed forces that are working abroad are losing thousands of pounds in poor currency rates due to banks over charging.

Steve from Hertford quoted  I work overseas on a regular basis as the money is so much better and depending on the client i can get paid in a different currency. the biggest issue is that as we get paid weekly so close protection exchange rates vary and in most cases when i go to the bank to exchange i get hammered by the banks with transfer fees and really poor foreign exchange rates.

If you are getting paying your suppliers or repatriating overseas earnings, the way you handle your currency transfers will make a significant difference to your bank balance when you return to the UK.

Uncompetitive exchange rates and ever present volatility in the currency markets can pose a very real threat to businesses with international focus. Not only do you need to consider the exchange rate you are being offered by your bank for today’s transfers, but also you need to consider where the rates may go between now and the next time you need to make a payment.

For example, the exchange rates can move by up to 10% in the space of just a few weeks, and this will obviously mean that your payment could cost 10% more or less depending on which way they move – there’s no way of telling with any certainty.

Fortunately there are ways of managing this exposure and specialist brokerages can often provide tailored solutions to suit your particular requirements allowing you to plan ahead with confidence, along with very tight margins when working out your exchange rate.

The lowdown on foreign exchange brokers

Foreign exchange comparison sites, such as Compare money transfer, save consumers and businesses hundreds of thousands of pounds as this is their sole business, they focus on getting clients a rate that is as close to the interbank rate as possible, while reducing or eliminating transfer fees and giving clients access to valuable products that can protect them from negative exchange rate movements in the future.

  • Tighter margins, getting you a better exchange rate for your payments
  • Faster international payments- same-day in many cases
    Forward contracts – fix the rate for a date in the future
  • Currency options – protection from negative rate movements, while still benefiting from improvements in the rates
  • No commission and heavily reduced transfer fees
  • Bespoke and professional service with a dedicated consultant
  • Free rate alert service and currency market updates
  • Regular transfer system and online payments

Please note that some of these products or services may not be available through all foreign exchange brokers.

Foreign exchange products available for Close Protection Officers

Spot contracts
If you already have the funds in place, you could arrange a spot transaction. This is simply the exchange of one currency for another at the current market price where the settlement happens within two working days. A broker should be able to get you a significantly better exchange rate for this transaction.

Forward contracts
A Forward contract allows you to fix a rate now for a date in the future (up to three years ahead). This means the rate is fixed regardless of exchange rate movements, thereby protecting you if the exchange rate moves against you.

Currency options
Like a forward contract, a ‘currency option’ allows you to exchange one currency for another on a future date, thereby protecting you from negative movements in the exchange rate. However, with an ‘option’, if the rate then moves in your favour you can still take advantage of this. Not all brokers can offer currency options to clients as it requires additional FSA authorisation.

Regular payments
If you will be exchanging a set amount of funds on a regular basis, you can set up a regular payment order which will automatically transfer the funds as required.

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